33 House Democrats Express Concern Over IMF Funds In Supplemental

FDL has obtained a copy of a letter written by 33 Democratic members of the House of Representatives expressing their concern after the Senate attached $100 billion for the IMF to the supplemental bill, which was intended primarily to fund the war in Afghanistan (PDF).

But those 18 may be difficult to come by. In addition to the 51 Democrats who voted against the original bill, there were 33 Democrats who subsequently joined Maxine Waters in expressing their concern over the Senate’s addition of the IMF funds — 14 of whom originally voted "yeah" on the supplemental:

May 21, 2009

The Honorable David Obey Chairman Committee on Appropriatins Room H-218, The Capitol U.S. House of Representatives Washington, DC 20515

We are writing to express our concern that the Senate has attached an inadequate International Monetary Fund (IMF) package to the FY 2009 supplemental appropriations bill, which is intended to proceed to conference this week.

We recognize the importance of a swift, internationally coordinated response to the global financial crisis to ensure that developing countries have the resources they need to cope with the crisis. However, Senate action to provide the IMF with $100 billion in funding and new authorities, including IMF gold sales, as requested by the Obama Administration, has precluded the possibility of House legislation on the IMF package.

In conference, we urge you to ensure that the IMF is not given a “blank check.” Specifically, the augmentation of IMF resources and prerogatives should be conditioned on a strong commitment by U.S. leadership to ensure that the institution becomes more transparent and accountable to all member countries, including the poorest.

Use the Stimulus Money for Stimulus, not Contraction. While the IMF pronounces its commitment to flexible policy approaches for countries in recession or depression, its track record since the onset of the economic crisis in September 2008 demonstrates routine imposition of contractionary monetary and fiscal policies which are exacerbating recessions in recipient countries. In conference, we urge inclusion of language to ensure that the funds allocated by Congress for global stimulus are used for stimulatory, and not contractionary, purposes.

Resources for Low-Income Countries. Low-income countries are suffering disproportionately as a result of a global financial crisis, which was not of their making. In conference, we urge inclusion of language requiring the U.S. Executive Director to the IMF to ensure that some of the revenue from the planned gold sales and/or other sources of income will be used to provide at least $5 billion in non-debt-creating assistance to the world’s poorest countries – either via debt relief or grants.

Democratic Process. Currently, the IMF negotiates and obtains approval for loans from the executive branch of recipient countries, leaving little opportunity for democratic debate in recipient countries over the content and terms of IMF loans. In conference, we urge inclusion of bill language requiring the U.S. Executive Director to the IMF to ensure parliamentary approval of all IMF loans. This would help to ensure greater democratic participation and transparency, as well as a safeguard against corruption.

Transparency. Some of the IMF’s most important documents are considered classified, strictly confidential, or secret. Among the secret documents are: 1) “side letters” containing policy conditions that the IMF requires a recipient government to implement as a condition of loan disbursements; and 2) transcripts of meetings of the Board of Executive Directors. Draft IMF documents are not disclosed prior to approval by the Board of Executive Directors which precludes input from country constituencies. In conference, we urge inclusion of language to ensure greater transparency and public availability of documents within a reasonable time period.

In this time of global economic crisis, it is critical to ensure a robust and effective global response. But it is also critical for Congress to ensure that the resources and authorities that are provided to the IMF to respond to the crisis are used in an effective manner that is consistent with congressional intent.

Jane Hamsher

Jane is the founder of Firedoglake.com. Her work has also appeared on the Huffington Post, Alternet and The American Prospect. She’s the author of the best selling book Killer Instinct and has produced such films Natural Born Killers and Permanent Midnight. She lives in Washington DC.Subscribe in a reader